Apple had high hopes that new artificial intelligence features would make the iPhone 16 a major success.
However, early pre-sale estimates suggest a more subdued response than the company anticipated.
After several years of sluggish iPhone sales, Apple needed the iPhone 16 to perform well. The excitement that once saw loyal fans lining up annually to trade in their devices has faded, especially since the introduction of 5G with the iPhone 12.
Apple was banking on a suite of AI-enhanced software features to entice consumers to upgrade.
Despite splashy launch events, it remains uncertain if Apple has successfully captured consumer interest.
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The company sold an estimated 37 million units during the first weekend of iPhone 16 pre-sales, reflecting a decline of over 12% compared to the same period last year, according to Ming-Chi Kuo, an Apple analyst with TF International Securities. Notably, demand for the higher-priced iPhone 16 Pro models was significantly lower than during the iPhone 15 launch.
One week after pre-sales began, Wedbush analyst Dan Ives estimated pre-sales at around 40 million units, slightly higher than Kuo’s figures.
CFRA Research technology analyst Angelo Zino also indicated a year-over-year decline in the first weekend’s preorder sales data.
More concerning than the overall number of devices sold is the type of phones consumers are choosing.
Analysts suggest there seems to be a greater preference for the lower-priced iPhone 16 and iPhone 16 Plus models over the Pro variants, which could impact the average selling price and overall revenue from iPhone sales.
During the initial pre-sale weekend, sales for the iPhone 16 Pro and iPhone 16 Pro Max were down 27% and 16% year-over-year, respectively, with Kuo reporting sales of 9.8 million and 17.1 million units. In contrast, sales of the standard iPhone 16 and Plus showed slight increases compared to the iPhone 15.
Zino expressed concern that the base iPhone models might be “too good,” indicating that the software-focused upgrades may have led to a higher mix of sales for the lower-priced models. “Given that this is largely a software upgrade cycle, my concern is that there were a greater mix of sales in the lower-price iPhone 16 than the higher-price devices,” he stated. “The standard devices received significant upgrades in their cameras and internal processors.”
Kuo also noted that delivery times for the iPhone 16 Pro models were shorter—1-2 weeks for the Pro model compared to 3-4 weeks for the iPhone 15—indicating potentially stronger demand for the newer devices.
However, he highlighted that the much-anticipated AI features, dubbed “Apple Intelligence,” won’t be available on the devices until next month, alongside the rollout of iOS 18.1. The company is also facing increased competition in China.
Zino emphasized the importance of word-of-mouth for consumer perception, stating that it may take time for users to recognize the value of the new technology.
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The pre-sale response suggests that the allure of integrated AI features may not be sufficient to elevate Apple from its current sales challenges.
While Apple can enhance the iPhone’s camera and screen size only to a certain extent, selling software updates that many consumers are hesitant about could prove to be a tougher challenge.
Analysts believe that, for most consumers outside of the most devoted Apple fans, the benefits of the AI features may not yet be fully understood.
Nonetheless, it’s early in the iPhone 16’s lifecycle, and sales have continued since the devices became available on September 20.
Moreover, analysts’ metrics for estimating pre-sales might not provide the complete picture. Lead times—the interval between ordering a device and its delivery—are considered a key demand indicator, suggesting that longer wait times reflect higher orders.
While lead times for the iPhone 16 are shorter than last year’s, this may indicate improved production efficiency, allowing Apple to manufacture more devices more quickly, according to Canalys analyst Lex Chiew. Zino added that Apple may have also increased supply ahead of the launch to stimulate a larger upgrade cycle with the iPhone 16.
A positive note came from T-Mobile CEO Mike Sievert, who mentioned that the carrier sold more iPhone 16s in the first week of pre-sales than it did with the iPhone 15 last year.
Apple is expected to release sales figures next month, which will only include seven days of pre-sales and ten days of regular sales.
Nevertheless, most analysts remain optimistic about the iPhone 16’s potential for success in the upcoming months, particularly as the critical final quarter of the year approaches.
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